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Competition law set to exclude mergers

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Mergers and acquisitions have been excluded from a list of potentially unfair practices recommended for inclusion in a proposed competition law, a report to the government will state today.

The Competition Policy Review Committee's report is also expected to recommend that all investigations under the proposed law should be civil cases and involve only financial penalties.

The report will recommend a comprehensive law against anti-competitive business conduct in six areas covering collusion and abuse of market power.

'Mergers will not be on the list of the six unfair conducts, as Hong Kong is a small market,' a source familiar with the committee's work said. 'It works in other countries like the US, but not in Hong Kong.'

Activities that could breach the law include price-fixing, market allocation, sales and production quotas, joint boycotts and unfair or discriminatory standards. This would mean that any action to fix market prices or restrict the supply of goods or services to competitors would violate the law.

Hong Kong has no general anti-competition law, with only telecommunications and broadcasting being covered by such legislation, which is common in developed countries.

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